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Politics

China replaces Shenzhen leaders as housing prices soar

Overheated real estate market risks keeping companies and workers away from tech hub

Chinese tech hub Shenzhen has become a hotbed of speculative real estate deals.

GUANGZHOU -- The Chinese technology hub of Shenzhen has replaced the mayor and and other top officials in what has been seen as punishment for failing to cool the city's overheated real estate market.

The Shenzhen Municipal People's Congress announced in late April that it had accepted the resignation of Mayor Chen Rugui. Qin Weizhong, vice governor of the surrounding Guangdong Province, was appointed acting mayor.

Chen had more than a year left in his five-year term before stepping down. Other replaced officials included the chief of the prosecutors' office and the head of the public employees' supervisory body.

Shenzhen's former leadership has faced criticism for its response to the city's soaring property prices.

A factor in the change was a failure to enforce the Chinese government's line that homes are for living in, not speculation, according to a view reported by Lianhe Zaobao, Singapore's largest Chinese-language newspaper, which says the officials' departure was not standard practice.

Shenzhen has become a hotbed of speculative housing deals fueled by online crowdfunding. Buyers have gone as far as using other people's names to skirt purchasing limits.

Shenzhen's property market has overheated to the point that businesses and workers could start avoiding the city, posing a risk to the tech revolution that Shenzhen has led.

The Chinese government has steadily tightened controls on real estate transactions since around 2016 in a bid to prevent a property bubble from unleashing financial market disruptions. Yet property values continue to climb throughout the country.

In 2020, 1 sq. meter of housing property fetched a nationwide average selling price of 9,980 yuan ($1,547) -- up around 8% from the year before and more than double a decade earlier. The government is expected to step up controls on housing prices, one of the biggest factors in public dissatisfaction with wealth disparities.

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